Healthy Connections

Data Innovations in South Burlington provides software that streamlines data collection for laboratories around the globe.

by Jason Koornick

Dave Potter, pictured, vice president and co-founder of Data Innovations in South Burlington, met Greg Vail, co-founder and company president, in 1988 when they both worked for IDX. Vail now works from an office in New Jersey, while Potter operates from the Vermont facility.

When Dave Potter, vice president of Data Innovations in South Burlington, tries to explain his company to people, he often draws a blank stare. He uses terms such as "clinical automation systems," "quality control materials vendors" and "laboratory interface solutions."

For most people, these concepts don't have a lot of meaning, but within the medical technology community, the work of Data Innovations is significant. The company's systems have played an important role in streamlining data collection in laboratories around the world.

In layman's terms, Data Innovations provides software for laboratories that connects the many disparate analyzers and data-collection machines, each speaking its own language, to a central laboratory database. Before such an interface existed, a laboratory technician would have to type statistics from tests into a central computer. This was a cumbersome process that was susceptible to human error.

Potter and his partner, company president Greg Vail, recognized the need to have the medical instruments communicate directly with the laboratory's central computer as early as 1989. Since that time, the partners have seen their systems installed in more than 2,000 laboratories around the world including those in VA Hospitals and the Department of Defense. Today, they have offices on three continents and more than 30 employees.

Potter explains that the biggest change he has seen in interface systems is their role in the laboratory. Due in part to Data Innovations' contribution to medical technology, "the equipment has come out of the closet and onto the laboratory floor," Potter says. Since the data is displayed and processed through the company's software, data collection and analysis have become "more part of the clinical and decision-making process that occurs in the lab."

The seed for Data Innovations was sowed in 1988 when Potter and Vail met as employees of IDX in South Burlington. They were software engineers assigned to the same project. "We really hit it off," Potter says.

The company was incorporated one year later, even as the partners were still working full-time for IDX. "It was happening in the evenings and on the weekends," Potter says.

Data Innovations' first contract was for Vail's in-laws, who ran a coffee distribution company in New Jersey. Soon after Data Innovations was formed, Vail moved to New York with his wife, who was working for her parents. "We like to say that in order to get the contract, Greg had to marry the client's daughter," Potter jokes. The partners designed a computer interface for the coffee company as their first project.

In 1991, the duo landed a contract with the Brigham and Women's Hospital in Boston that would identify the company's niche and set the stage for the growth of the next 10 years. It was during this critical year that Potter decided to leave IDX. "At that time we had enough work for the first six months of 1992," Potter says. "We knew that we would have to find other contracts after that."

While working on the Brigham contract, Potter, who was living in Huntington, would commute to Boston each week. Vail was doing the same thing from New York.

Doing the contract work at Brigham was "when things began to come into focus," Potter says. "Also the concept of having a product and recurring revenue was desirable."

Potter explains that a medical laboratory has a lot of medical devices and analyzers made by a wide range of manufacturers. There is also a central computer database known as the Lab Information System (LIS) with which the devices have to be able to communicate. "Each vendor has their own protocols and methodologies. The challenge that we realized at Brigham was to connect the different devices with the LIS," he says. "By interfacing the devices, we realized that each device needs a standard protocol. Our goal was to alleviate the burden of the laboratory so the staff wouldn't have to write a new protocol for each new device."

In the early 1990s, Potter explains, many laboratories were looking for this kind of solution. Vail and Potter instantly recognized the need in the medical community for an interface between the devices and the LIS. The same basic need exists to this day. "The technology has changed, but the fundamental need is the same as what we did for the Brigham," Potter says.

Growth came naturally for Data Innovations following the Brigham work. "Once we recognized the need for lab interface systems, we looked for other hospitals that had this need," Potter says. "Immediately we found the Veterans Administration [VA]. They had a small staff writing interfaces, so often, the individual hospitals would have to wait up to four years to get their interface for a new device."

Amy Jaquish, production and technical services manager, and Adam Lamore, software engineer, review Data Innovations' support log, which they use to diagnose problems with software. Every conversation and e-mail is recorded there.

The VA was a perfect client for the partners because each one of the 160 VA hospitals had the same lab system. In 1994, they tried out the same product that had been developed for the Brigham in the Philadelphia VA hospital.

Once Data Innovations software worked with the VA labs, they had to sell the other hospitals on the product. Although the success of the Philadelphia VA was known to the other hospitals, "it wasn't a landslide because we didn't have a government contract," Potter says.

At that time, Potter was still working from his home office in Huntington, and Vail was in New York. Vail contacted VA hospitals around the country. The partners would travel to each hospital to install the interface system. They have since been awarded the government contract, and their system is active in 140 VA hospitals around the world. "We still provide them with support and updated products," Potter says.

Data Innovations grew to three employees in 1995 with the hiring of a full-time programmer who worked from a home office in Baltimore. "Although the corporate office was in Huntington, we were still a virtual company," Potter says. In the spring of 1996, the company moved into its first office on Kimball Avenue in South Burlington. With 2,500 square feet of space, Potter says that they were anticipating growth.

Soon after the move, the partners won another government contract. They were hired to design a laboratory interface for the U.S. Department of Defense. At the time, the DOD had the same lab systems as the VA hospitals. According to Potter, the hardware and software were outdated. The work was similar to what they had done for the VA, except it didn't require as much traveling because they were subcontractors.

Although the company was hired to do specific work for the DOD, its focus had moved away from contract work to providing manufacturers and vendors of medical equipment with interface solutions. "We were looking for other markets for our products," Potter says.

"Sometimes it is a hard education process for our customers to understand that we don't do a custom interface for each project. What we offer is really an off-the-shelf product. You just can't get it at Staples."

Along with vendors of LIS equipment, instrument manufacturers were also becoming customers. Potter says competition among the instrument manufacturers helped their business.

"The manufacturers are always trying to kick their competitors out of the labs," he says. "We were able to put our software between the LIS and a new analyzer to make the interface look like the old analyzer through a process called 'instrument emulation.' The lab is happy because they have a new analyzer, and the manufacturer is happy because their product is in the lab."

The strategy paid off for Data Innovations, which opened up its business to a new market segment in instrument manufacturers. It entered into partnership agreements with LIS vendors as well. The company was able to secure its position in the market by providing software to both the manufacturers and vendors. "Quite often we have the instrument talking to the LIS through our software, which is part of both systems. Our product is coming from two sources," Potter says.

The founders' instincts about growth were correct, because in the three years after the move to Kimball Avenue, Data Innovations grew from four to 13 employees. Most of the hires were technical staff, Potter says. "The 2,500 square feet of space expanded to 4,000 and we outgrew that pretty quickly," he says.

In the same period, Data Innovations had its first foray into the international marketplace. It took on customers from Brazil and other parts of South America. For Potter, the experience of working with customers in foreign countries was "a complete adventure. I had never traveled outside of the country before," he says. "Luckily for us, most people could speak English, since many of the doctors that we worked with had come to the U.S. for training."

The experience led to the opening of the company's first foreign sales and support office in Belgium in 1999. "We need to have a physical presence to provide product support in other countries. They have to know the local customs," he says. The Belgium office of Data Innovations has one employee, but the founders hope to grow the staff there in 2002.

In November 2001, the company opened its first office in Hong Kong with three employees.

Potter explains that the foreign branches of Data Innovations are subsidiaries of the parent company. They use the company's existing technology so they aren't required to design their own products.

Data Innovations has called 120 Kimball Ave. in South Burlington home since 1999. The space was planned to give every employee an office with a window.

In 1999, the company outgrew the office and moved into a 6,000-square-foot facility down the road at 120 Kimball Ave. Since Data Innovations was the first tenant in the new building, the founders had the opportunity to work with the builder to lay out their office space.

Potter says one of their main goals was to design a comfortable work environment with a windowed office for every employee. "Greg and I had been exposed to many cubicle environments," he says. "A design goal was to give everyone a window with natural light."

The comfort strategy seems to be working, according to promotional writer Josey Goodrich, who has worked at Data Innovations for 15 months. "It's amazing to have an office with a window and a door," she says. "It's a very unique work environment."

Goodrich also appreciates the company's organizational structure. "It's a very flat management structure," she says. "Everyone here is available for everyone else. If I have a question for Dave, I can ask him directly without having to go through a chain of supervisors and getting an answer two days later."

Potter attributes part of the company's success to the laid-back office environment. "We get comments on the work environment when people from big corporations come here," he says. "You gotta have fun at what you are doing. We always try to keep a casual, fun environment even when there's a lot of work to do."

Dave DeLang is the company's installation and support manager. He leads a team of six programmers who he claims are "too smart for their own good." He believes working at Data Innovations is both challenging and fun.

"They give me as much as I can handle. The work environment can't be beat." He says the company has grown up in the five years he has worked there. "It's gotten a lot more professional. Since I've been here there has been a lot more high-quality programming and quality control."

With the help of their satisfied employees, the founders of Data Innovations hope to capture an even larger market segment in the future. "We are looking to be the product leader in the market. Our goal is to work with the instrument manufacturers and LIS vendors to continue the advancement of the near-instrument workstation. We want to grow our user sales and add clinical value to the laboratories and their staff," Potter says. One of the advantages that the team has benefited from is that they are a relatively small company compared with their competitors. "We can move faster than bigger groups," Potter says.

Data Innovations' partners agree that the company's efficiency is a strong point. Hunter Bagwell is the product manager and program manager at Roche Diagnostics, one of the largest health care manufacturers in the world. Bagwell says Roche uses Data Innovations' Instrument Manager in its flagship products.

As Data Innovations' installation and support manager, Dave DeLang leads a team of six programmers who he claims are "too smart for their own good."

"One of the things that I enjoy about working with DI is that they don't get bogged down in what I call 'decision-paralysis.' They have a secure development prototype process that allows them to bring products forth very quickly."

Bagwell says that DI has created products that work better than those developed by larger companies. "Other companies spend $30 million on a similar product that is on the shelves," he says. "Their integrity is great. They are willing to take on new challenges and move forward with production."

As for the competition, Potter points out that "our biggest competitor is our actual customers - the instrument manufacturers and LIS vendors who use our system. We have actually displaced some of the groups that have been working on interface systems."

As far as staying in Vermont, Potter says, "Realistically we could run the company from anywhere, but we do it from Vermont because it's a great place to be." That's a concept that any Vermonter can understand. •

Originally published in March 2002 Business People-Vermont